Sweden's Central Bank Cuts Key Policy Rate

12/18/2012 3:53 AM ET

Sweden's central bank on Tuesday reduced its benchmark interest rate by a quarter point to 1 percent, as widely expected.

Riksbank said the weak developments in the euro area are clearly affecting the Swedish economy, which is now slowing down. The central bank cut the gross domestic product forecast for the economy to 1.2 percent growth in 2013 from the previous prediction of 1.8 percent.

In Sweden, inflationary pressures are low, household consumption is weak and unemployment is rising, according to the bank's Executive Board.

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